Nation-building: a success in Iraq?

Cross-posted from Aymenn Jawad Al-Tamimi at Foreign Policy Journal

Did the U.S. spending of $53 billion on reconstruction efforts, or “nation-building,” work in Iraq? According to New York Times columnist David Brooks, it did.

Unfortunately, however, his argument is flawed on numerous counts by selective evidence.

To begin with, he cites the International Monetary Fund’s report that Iraq will have the twelfth fastest growing economy in the world with a projected 7% economic growth this year, but such a statistic is misleading because, as in Hugo Chávez’s Venezuela, this expansion is almost entirely due to rising oil prices, and has nothing to do with development projects funded by U.S. taxpayers. Indeed, Iraq has become increasingly oil-dependent like its neighbors in the Gulf region, such that petroleum revenues account for about 70% of GDP and around 90% of government revenues.

The growing reliance on oil for income is having several adverse effects. Most importantly, since the oil industry is not labor intensive, the present government can do little to alleviate the problem of unemployment in the country that stands at approximately 15%. Nations that depend on petroleum exports for income normally create bureaucratic jobs that serve little practical purpose to compensate for the lack of employment opportunities offered by the petroleum industry. Nonetheless, this cannot be done much further in Iraq, where the state is already the largest employer with a workforce of around 3 million, or roughly 10% of the population. Since 2005, the number of public employees has doubled.

In fact, the revenues from petroleum have provided the government an excuse for leaving unreformed the top-down, centralized command economy that is a legacy of, in the words of Daniel Pipes, the “Stalinist nightmare of Saddam Hussein,” from which Iraq is still emerging. The results? Massive corruption and inefficient bureaucracy that hinder any major reconstruction efforts. If anything, the pouring in of development money from the U.S. has only increased corruption. In 2003, Iraq ranked 113th out of 133 countries on Transparency International’s Corruption Perception Index (CPI). Six years later, Iraq fell to 176th out of 180 countries.

As for bureaucracy, one need only look at the prolonged and poor quality construction of schools, hospitals, water treatment plants and electricity substations. In 2009, the World Bank ranked Iraq 153rd out of 183 countries for ease of doing business, and 94th out of 183 countries for dealing with construction permits. On average, fourteen permits are required to build anything in the country and take 215 days to complete. For example, in May, the city of Karbala in the south announced a plan to build 250 housing units, yet by the end of June, nothing had happened owing to difficulty in obtaining the necessary licenses.

A further problem is that ambitious reconstruction projects funded by U.S. taxpayers, even if finished, lack skilled workers to manage them effectively, something which Brooks concedes. Such an outcome was a result of the fact that Iraqis were often not consulted as to whether they wanted these reconstruction projects in the first place. For instance, in Hilla, sixty miles south of Baghdad, a $4 million maternity hospital built by the U.S. is largely unable to serve its purpose because the staff cannot operate most of the equipment. Likewise, a sewage treatment system in Fallujah, at a cost of $104 million, has been left partly finished, unable to operate at full capacity and only able to serve at most one sixth of the city’s residents because of poor quality work on construction and a lack of sufficiently trained Iraqi staff to put it to proper use.

A minor point advanced by Brooks is the fact that there is increased Internet access, along with ownership and availability of consumer goods such as cell phones. Again, though, none of this can be attributed to U.S. spending on reconstruction efforts, but is actually due to the removal of tariffs by the Coalition Provisional Authority (CPA) in the period 2003-2004, which led to a flood of cheap imports from China, Iran and Turkey and aggravated the problem of unemployment in the immediate aftermath of the invasion. Moreover, ownership of consumer goods is not a real indication of the humanitarian situation in Iraq, which has the highest illiteracy rate and the second highest infant mortality rate in the Middle East.

With all these major shortcomings, is it any surprise that the Inspector General for Iraq Reconstruction, in direct contradiction of Brooks’s explicit statement that “nation building…has been a success,” considers the rebuilding enterprise since 2003 a failure?

Nevertheless, the question arises of who is to blame for this monumental waste of money. Of course, one feels tempted to blame Iraqis, but as Daniel Pipes concludes, “the real blame belongs with the George W. Bush administration which had a vision of a free, … stable, democratic, and prosperous Iraq and did not let realities get in the way of its fantasy. As so often was the case with Bush, the motives were good but the implementation terrible.”